State Bank of India has revised housing loan scheme for employees by incorporating liberal provisions in terms of maximum limits and expanded repayment period across categories.

The scheme was last revised in February, 2008. The latest revision was announced in a corporate circular dated September 30, 2014.

Group insurance

The new housing loan entitlements were decided on by a meeting of the executive committee of the central board held in Mumbai on September 19.

The benefit of revised housing loan scheme will be applicable to all eligible employees who are on roll as on September 19. The revised ceiling and interest rates will be effective immediately to all new loans sanctioned/ disbursed on or after September 30.

The bank is considering the possibility of covering all new staff housing loan accounts with a group insurance policy as an added welfare measure to all employees.

The central board noted that the loan limits fixed six years ago have lost relevance due to increase in prices of land and construction materials. Property rates have gone up substantially.

Employees/ officers have had to resort to borrowing on commercial rates to complete housing projects or to acquire ready built-up flats/houses.

Loan conversion

Existing commercial housing loan may be converted under the new scheme. Option for enhancement of loans is also allowed to liquidate existing loan, subject to conditions.

On promotion, an employee will be permitted to draw up the entitlement to the grade/scale to which he/she is promoted, for repaying loans taken on commercial/public terms.

The board noted that a number of employees have raised additional housing loan from the bank at commercial rates. Such staff members may be permitted to take the housing loan up to their revised entitlement for repaying the outstanding housing loan, subject to conditions. This facility is available only as a one-time measure and has to be used up before June 30, 2015.

Repayment for the new loans will be in 360 instalments (224 for principal + 112 for interest + maximum moratorium of 24 months.)

In the case of existing loans, the original repayment schedule of 168 + 72 instalments will continue.

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